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Not Dead Yet
Editor in Chief
U.S. consumers spent an estimated $8.28 billion online in second-quarter 2000, up from $7.04 billion in the first quarter, according to preliminary findings by market research firm Harris Interactive and U.S. Bancorp Piper Jaffray, Minneapolis. The survey, part of the Harris Interactive e.commercePulse study, was conducted online with 97,633 adult online users in April, May and June.
This surge was led by nearly 20% quarterly growth in the travel services sector and a 13% increase in online auctions. Both in awareness among Internet users and share of online purchasers, Amazon.com has the strongest e-commerce brand, followed closely by eBay.
"E-Commerce is not dead," says Greg Konezny, vice president and senior e-consumer research analyst for U.S. Bancorp Piper Jaffray. "The market adjustment in April was a wake-up call to both investors and online retailers, who were put on notice that stricter expectations were being exerted on their performance. But it didn't dissuade consumers from continuing to use the Internet to buy goods and services. The Internet as a means of commerce is here to stay."
Consumers spent an additional estimated $15 billion by phone and in stores as a result of shopping online, the research shows. This ratio of $1.74 spent offline for every dollar spent online is down from $1.95 for every dollar in first-quarter 1999 and $2.34 for every dollar in fourth-quarter 1999.
Despite its rumored financial woes, Amazon.com continues to demonstrate the power of its brand, says Harris Interactive. More people associate Amazon with e-commerce than any other site and more consumers bought from Amazon than any other e-commerce site. When asked to name the first site that came to mind when thinking about sites that sell products or services over the Internet, nearly one in four Internet users (24.1%) said Amazon. In addition, among consumers who made an online purchase, 18.7% made a purchase from Amazon. eBay's brand was a strong second in terms of both "mindshare"--it was mentioned first by 16.1% of Internet users--and purchaser share (15.8% of online buyers bought from eBay). Yahoo! had the third-highest mindshare, mentioned first by 4.9% of Internet users; priceline.com was fourth (2.7%). No other site was mentioned by more than 2% of Internet users.
The leading categories in the second quarter were travel services, where sales topped $2.4 billion, computer hardware/peripherals at $841 million and auctions, which approached $729 million. The markets showing the strongest online growth were the smaller sectors of fitness/sports equipment, up 56% to $107 million, and home/garden, up 38% to $114 million. Sales in the online clothing/apparel market rose 11% to $684 million. The average number of online buyers in a given month increased most in the travel services, clothing/apparel and home/garden sectors.
|Vertical e-Commerce Figures, Q2 2000 vs. Q1 2000|
|Sector||Q2 Online Purchases(in millions)||Q1 Online Purchases(in millions)||Change|
|Company Mind Share||Company Online Purchaser Share|